SLG Newsletter Feb 2019
Dear Friends and Clients,
The UAE has put in plenty of new incentives to boost business. Ras al Khaimah now offers a new symbiosis of a Free Zone and offshore company, Dubai awards 3 years business visas when buying or only paying the down payment on apartments. If you have a travel ban due to unpaid rent, you can still pay your debts at the airport and then leave.
It is also time to signal that the economy is getting going again. In itself, recession phases are indeed quite positive, because if it were only uphill you would lose the feeling for the downhill part of it. Only if you know the night, can you appreciate the day.
The declining property prices and lower rents are certainly an incentive for new investments. Admirable is the meanwhile thorough diversification away from the oil industry. The services sector has now surpassed the income from the oil industry, which only contributes 25% to the GDP.
In the Far East, the guesswork comes up as to whether Trump wants to make North Korea a lover and thus a new tiger. Although the beauty of the chairman is beyond doubt, this can be let loose in the choice of partner. Trump or Xi Jinping, that’s the question – or both?
Myanmar is fighting for its image and is trying to attract new investors through incentives, tax breaks and subsidies. We already knew that Singapore was not corrupt, now the city-state has climbed to third place among non-corrupt countries. The Thai baht is flying high; it has gained 5% against the Euro. The first elections after 5 years of military dictatorship are scheduled for the end of March.
Let’s enjoy the cool weather and as well as our annual office party with many clients and friends on March 20th. As space is limited please register if you would like to join.
RAKICC has launched “Premium Product” in January:
RAK International Corporate Centre (RAKICC) in cooperation with Ras Al Khaimah Economic Zone (RAKEZ) launched a new product: a “combined legal structure” of an offshore company under RAKICC which incorporates a subsidiary in RAKEZ, which allows offshore companies to carry out their business activities in the UAE. The premium product is designed to address customer needs, changing regulatory pressure and bank requirements, according RAKICC. The legal structure allows the following benefits:
– Being treated as a business enterprise of substance,
– Having a commercial license issued by RAKEZ,
– Opening bank accounts locally and internationally,
– Obtaining residence visas for enterprises established in RAKEZ,
– Providing office facilities,
– Double Tax Agreement benefits.
If you have further questions in this matter, please do not hesitate to contact us.
Get free trade license, if you buy a Dubai house:
Emaar and Dubai Multi Commodities Centre (DMCC) has introduced a new project presenting its still under construction 184-unit building in Dubai Hills Estate Executive Residences. Property owners who will pay 20% of the apartment price will obtain a free 3-year renewable business license which is able to apply for employee visas, free 3-year renewable family residency visas and 100% business ownership. Prices of the property range from AED 1.2 to AED 1.6 million for a 2-bed apartment and below AED 1 million for a one-bedroom apartment. This offer will now allow businesses to work legally from the comfort of their own homes. The construction of the building is scheduled to be finished by 2021.
If you pay rent debt at Dubai airport you can get travel ban lifted:
Tenants who incurred a travel ban due to non-payment of rent may now settle their dues at the Dubai Airport directly and exit the country. Through the Rental Dispute Centre’s (RDC) smart system, cases can be presented to the judge and a decision can be given at the same time. Judge Abdulqader Mousa, head of RDC said, “The defaulters are given a chance to settle part of the amount they owe and be allowed to travel. They could also find someone to bail them out and prevent their arrest and detention. The smart development has been proven very helpful as it would allow people facing rental issues to board their flights without any problems. Not only does this new procedure make life easier for all the parties concerned, it also encourages reconciliation and amicable settlement.
Smart Audit initiative launched for faster real estate transactions:
Dubai Land Department (DLD) announced the launch of a new project called Smart Audit that enables the completion of real estate transactions on the same day. 112 transactions were completed on the first day of implementation with the help of smart technology and authorized staff tasked to work beyond the official working hours. DLD aims to provide easy services for the real estate market in the country. CEO of Real Estate Registration and Services of DLD, Mr. Al Marri said, “This initiative will contribute to raising the absorptive capacity of transactions carried out by DLD’s departments, where we are now able to provide real estate transaction services through real estate registration trustee offices until the late hours of the working day.”
No VAT charges on bank interest or dividends:
The UAE Federal Tax Authority (FTA) has issued a clarification stating that passively earned interest from bank deposits or dividend income is outside the scope of VAT and therefore tax cannot be applied. Taxpayers are not required to report a VAT return whether it may be a bank interest or dividend income because there is a lack of supply of goods and services. Dividend returns is the amount paid by a company to the shareholder out of profit. The interest can be received passively if a business/person deposits an amount on a certain bank account and earns interest without doing anything apart from depositing the money.
No VAT on donations, grants, sponsorships:
The Federal Tax Authority (FTA) has explained on their website under “Public Clarifications” regarding the imposition of Value Added Tax (VAT) on donations, grants, and sponsorships. No VAT shall apply if a donation is unconditional and if it is given without any implied benefit. A taxable person may receive payments through grants, sponsorships and donations from other parties including but not limited to employees, customers, and suppliers which needs to be determined whether such payments are subject to VAT or whether they be treated as consideration against taxable supplies or not.
New free trade zone in Dubai for an e-commerce hub:
Dubai South announced that it will be opening a new e-commerce free trade zone that will offer foreign firms 100 percent ownership. The new free zone EZDubai will be located near Al Maktoum International Airport. Dubai South aims to attract businesses from the e-commerce, logistics and other related fields of business. A budget of AED 2 billion is expected to be spent on the new project which will be used for infrastructure, warehouses and offices.
Ajman Media City Free Zone has launched new incentives for investors:
Ajman Media City Free Zone (AMCFZ) has stepped up to increase growth and attract foreign investment by introducing new initiatives, partners and trade agreements. AMCFZ now offers exemptions on the mandatory eChannel fee which is required for all new companies. With the free zone’s 2-year package, up to AED 5,000 is deducted. As with the 3-year visa package, there is an AED 5,000 exemption and one-visa fee waived. According to the CEO of AMCFZ, the free zone is also committed to building a wider network of trustworthy agents which offer the same level of service and quality to customers in key cities, and are equipped with the same values to boost customer service. Also, the management has made efforts to build longer term relationships with countries like the United Kingdom and the rest of Western Europe.
The Far East
Myanmar: Trademark Law and Industrial Design Law passed
Myanmar has enacted the Trademark Law and the Industrial Design Law on January 30 which was passed into legislation by Pyidaungsu Hluttaw. However, implementation and effective date of the laws which are drafted based on international standards are yet to be decided by the President of Myanmar. With the Trademark Law, trademark holders will have to re-register their companies shifting from the previous first-to-use system to a first-to-file system. The Industrial Design Bill will cover the law surrounding the ownership of designs made by employees. In addition to the enacted bills, the Copyright and Patent Bills are also expected to be passed soon which are set to further protect intellectual property rights.
Myanmar: Foreign business leaders join call for investments
Members of foreign businesses like Germany, America, Australia, United Kingdom, and Italy have conveyed their clarion call urging investors to invest in Myanmar highlighting the role of Foreign Direct Investment (FDI). The open letter, which was signed in Yangon, states the request of the foreign business leaders that Myanmar requires the help of foreign investors to regenerate its economy and meet the demands of everyday life. In return, Myanmar offers private sector investment opportunities on all sectors of the economy as presented in the Myanmar Sustainable Development Plan (MSDP). Chris Hughes, chair of AustCham Myanmar, said the letter was to tell investors in their respective home markets that good business can and is being done in Myanmar right now, and to reassure Myanmar businesses that foreign investors are not a threat.
Myanmar: Chin State offers opportunities for investors
Myanmar’s Chin State intends to attract local and foreign investors to help in the development of tourism, agriculture, livestock, and electricity generation sectors. The Chin State’s tourism sector offers a substantial amount of tourism sites and investors are needed to further develop and preserve the spots. For the agriculture and livestock sector, the state needs investors to boost the manufacture of products and initiate the modernization of facilities to increase production. The state government is currently in the process of developing their roads and infrastructures, including the airport, to speed up connections. Besides that, a proposal has been made to lengthen the tax emption period granted to investors from 7 to 10 years.
Singapore: 3rd most corrupt-free country in the world
In 2018, Singapore was ranked the 3rd most corrupt-free country in the world, moving up 3 spots from 6th place in 2017 according to Transparency International. The international non-governmental organization, which ranks and measures countries and territories by their perceived levels of public-sector corruption, scored Singapore in the Corruption Perception Index with 85 points out of 100. Singapore tied the 3rd place with Finland, while Denmark clinched top spot as the most corrupt-free country at 88 points and New Zealand was ranked second at 87 points.
This makes Singapore the second most corrupt-free country in Asia. Some of the criteria Transparency International uses to measure public-sector corruption include rates of bribery, diversion of public funds and conflicts of interest. According to the Corrupt Practices Investigation Bureau’s director Denis Tang, only an average of eight public-sector employees were prosecuted for corruption and related offences over the last three years.